Business Standard quoted India government said it is not convinced by the geological reasons cited by Reliance Industries to justify the declining output from its KG D6 gas field, the largest in the country. Against a projected output of 80 million standard cubic metres a day, the field is producing only 26 million standard cubic metres.

Mr Jaipal Reddy petroleum minister said that “The RIL consortium has told us it would not be able to produce as much as it had projected, owing to geological complexities. The ministry is not convinced. This is being examined.”

However, Canadian company Niko Resources has 10% stake in the D6 block in the Krishna Godavari basin, while operators Reliance and BP have stakes of 60% and 30%, respectively.

Mr GC Chaturvedi petroleum secretary said that “That is a fear. For long, RIL has urged to reflect international gas prices, the price of KG D6 gas be raised 3 fold from the current USD 4.2 per million British thermal unit. The current price was fixed for a 5 year period ending March 2014.

RIL stated for the quarter ended June 30th, gas production from the KG D6 field was 33.1% less than in the previous quarter. The reduction in production was due to reservoir complexity and natural decline.

RIL said that significant efforts towards augmenting production from KG D6 have been undertaken in the Q1. To enhance gas recovery from existing fields, it plans to submit a revised field development plan for D1 to D3. It also plans to pursue approval of the RFDP for D26 submitted in the previous quarter. Also, to expedite development projects of other discoveries, RIL is preparing development plans, based on an integrated concept it plans to submit in the quarter ending December.

Source - Business Standard

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